The National Community Pharmacists Association has presented two proposals to the Department of Treasury in an effort to amend new flexible spending account regulations.
Since July 1, Internal Revenue Service rules have mandated that in order to continue processing FSA debit card transactions, pharmacies must have an inventory information approval system (IIAS) that meets certification requirements of the Special Interest Group for IIAS Standards (SIGIS).
NCPA representatives met with Treasury and IRS officials earlier this month in an effort to resolve issues that, they say, have put independent community pharmacies at a competitive disadvantage in the FSA market.
"Patients and community pharmacies have experienced significant disruption as a result of this regulation," said NCPA Executive Vice President and CEO Bruce T. Roberts. "Every time a transaction can't be processed, patients are forced to leave their pharmacy of choice to find a vendor recognized by their health plan. With the year's end approaching and FSA balances expiring, the problem will only grow worse without intervention."
According to officials, the rule provides an exemption for pharmacies whose sales are comprised of at least 90 percent prescription drugs and other qualifying medical supplies. However, many health insurance plan administrators and employers are refusing to honor the exemption and aren't processing any FSA debit card transactions from such stores.
In a letter to Treasury, the NCPA has aked the government to:
- Suspend IRS audit requirements of FSA and health reimbursement account (HRA) transactions at community pharmacies registered under the 90 percent exemption for one year; and
- Ask administrators to honor the 90 percent rule to ensure that patients can continue purchasing eligible medical products at the pharmacy of their choice.
"Fear of an IRS audit has emerged as a primary reason health plan sponsors have refused to recognize purchases at community pharmacies under the 90 percent rule. Maintaining the documentation necessary to comply with an audit can pose a significant burden," Roberts said. "A one-year moratorium on auditing this one class of FSA transactions would mitigate the disruption for patients and allow additional time for resolving problems. A message from the IRS to plan sponsors reminding them of the purpose of the 90 percent rule and the need to support it would go a long way as well."
Soon after the new rule took effect, NCPA members began expressing frustration with a variety of problems, including the perceived lack of responsiveness from SIGIS, the private organization established to help pharmacies accommodate their FSA/HRA debit card users. NCPA voiced those concerns to SIGIS leaders, who recently responded with a number of service improvements.